What have banks learnt about their customers during lockdown?

In a year of immense upheaval for society, the banking industry has not escaped the far reaching impacts of the pandemic and shutdown of high streets across the UK. Customers have swiftly had to change some of their banking habits in the kind of industry shift not experienced in living memory. While the period has seen customers’ usual choice of banking channels reduced, it has presented banks with unique customer interactions and data to learn from. This experience will pave the roadmap for the next decade and reshape the customer experience of banking.  But before the future can become reality, what exactly have banks learnt?

Digital First?

The surge in digital transactions came as no surprise as many branches were forced to close and consumers moved online. The majority of banks have spent much of the last decade with a considerable focus on their digital strategies and investing in improving apps and online platforms. As a result most of the infrastructure was in place to ensure the industry was well positioned for this transition. Interestingly though, despite the lockdowns, banks have continued to see a relatively high use of self-service systems and branches. It is clear that customers still place value on physical banking, and research we recently conducted found that many consumers will never make the switch to bank predominantly online in the future, as well as a quarter highlighting the importance of face-to-face advice when questioned about their banking needs. Within this is the ongoing access to cash debate, which is a priority for the sector and has many facets. It is not just the less digitally enabled customers that should be considered here, but also the wide number of businesses, particularly SMEs, which rely on physical modes of interaction with their bank to ensure the smoothing running of their day-to-day operations.

Interaction everywhere 

Where customers have had reduced opportunities for face-to-face access to banking staff and in-branch experiences, self-service has come to the fore by continuing to offer customers a wide range of services. One key requirement for both customers and SMEs has been the ability to continue to use deposit services if they were not able to access in-branch services.  This is a trend that is likely to continue and offers a glimpse into the future, with banks striking a balance between convenient physical and digital services. 

Getting this balance right on an ongoing basis and not just during lockdown is part of how we envision the future of banking. Post pandemic the pressure on banks to extend cost efficiencies will continue and this will no doubt keep on impacting branch numbers; building on the ongoing reductions we have already seen across the UK in the past 12 months. Self-service technology is an option to bridge the gap, enabling banks to build a strong, leave-behind strategy, ensuring customers have access to their transactional banking needs and a chance to maintain brand presence.

Through unprecedented times, it has become evident that the ongoing availability of all banking services was a crucial factor in making customers feel supported, reassured and connected. Over the long term how banks have dealt with providing services during the pandemic will help them to build loyalty and retain customers - if they have got it right. Underpinning success has been technology’s role in enabling banks to operate across multiple channels, both digitally and physically. While our research during the pandemic found that 41% of consumers were comfortable to engage via an app for their current banking needs, a third said they would always want access to physical, in-branch banking services in some capacity. This highlights how banks have a balancing act on their hands to fulfil the needs of their customer base, both now and in the future. 

The key takeaway here is that providing customers with choice should be at the top of a bank’s agenda, and the last year of lockdowns has shown there won’t be a ‘one size fits all’ solution for a bank to meet customer expectations.